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The Application for the Certification of Startups for the 15% Taxation Bene

The Application for the Certification of Startups for the 15% Taxation Bene Publicado: 23-10-2023

On July 21, 2023, BOE (The Spanish Official Gazette) published the Ministerial Order PCM/825/2023 which regulates the criteria and procedure for the certification of companies qualified as startups. Thanks to this, it is now possible to apply for such certification before the National Innovation Company (Enisa), which is part of the Ministry of Industry, Trade and Tourism, and thus benefit from the reduction of the Corporate Income Tax rate FROM 25% to 15%

Spain is the first European country to have a system to issue startup certifications. Therefore, investing in Spain is once again a great option, as it provides wide legal certainty to the startup sector and promotes an increase in investment by large capital funds. 

What is the application procedure? 

Any company that meets the requirements of the Order to qualify for the tax and social benefits established in the Startups Law must apply to Enisa to obtain the certification.

This agency must evaluate the innovative and scalable nature of the company in question. Enisa´s resolution must be provided in a maximum period of 3 months after the company has submitted all the necessary documentation for the application. The administrative silence to such request is understood as positive, that is, the application will be successful if no resolution is issued within such term. 

The application process is free. 

What are the criteria to obtain the emerging company certification and the tax benefit? 

In order to apply for certification, a series of requirements must be met: 

  • The application must be a company or with less than 5 years of existence. In addition, that registered office must be in Spanish territory. 
  • Only commercial companies may be certified. Freelancers will not be certified. 
  • The application shall not have paid dividends since its incorporation, nor be a listed company. 
  • At least 60% of its staff must have an employment contract in Spain
  • It must develop an innovative and scalable entrepreneurship project, which will be evaluated by Enisa considering factors such as: the degree of innovation, the degree of attractiveness of the market, the life stage of the company, the business model, the business competition, the teamwork, the dependence on other economic operators, customers, among others. 
  • The company must register the startup certification in the relevant Commercial Registry.
  • If the company no longer complies with the above criteria, the certification will lose its validity. 

What are the advantages? 

The main advantages of obtaining this certification are: 

  • The reduction of the corporate income tax rate to 15% in the first tax period in which its tax base is positive and in the following three periods, as long as it maintains its status as a startup company. 
  • The possible deferral of tax debts.
  • Exemption from the obligation to make installment payments of Corporate Income Tax.
  • Exemption from the obligation to obtain the Foreign Identity Number (NIE) for its non-resident foreign investors.

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